India Crude: Down 3% on MCX, NYMEX as EIA backs out of buying oil
Friday, Mar 27
By Sayantan Sarkar
MUMBAI – Crude oil contracts on Multi Commodity Exchange of India fell over 2% today, tailing those on New York Mercantile Exchange after the US Energy Information Administration reportedly backed out from purchasing 30 mln barrel of oil, weighing on the sentiment.
The market is already oversupplied with an ongoing price war between Saudi Arabia and Russia, which has eaten into demand for crude oil significantly.
At 1815 IST, the April contract on MCX was at 1,728 rupees per bbl, down 3.3%, while the May contract on NYMEX was at $21.73, down 3.8% from the previous close.
The coronavirus pandemic continues to hit demand for oil as many countries are now under lockdown, including India. So far, the virus has claimed over 20,000 lives globally and infected 500,000.
The government’s decision to extend its ban on international flights till Apr 14 will lead to a further slump in demand for fuel, said Ajay Kedia, the managing director at Kedia Stocks and Commodities Ltd.
On Thursday, the US Labor Department said 3.28 mln citizens had filed for unemployment claims in the week ended Saturday, sharply higher than just 282,000 a week ago. This indicates how severely the COVID-19 pandemic has hit the US economy, analysts said.
“…the first real effects of the restrictions to movement in a number of US states are only likely to become apparent during the course of the coming weeks. The oil price is therefore likely to remain under pressure,” Commerzbank AG said in a report.
For the rest of the day, the contract on MCX is seen at 1,627-1,931 rupees per bbl, and the NYMEX contract is seen at $19.35-$27.80 a bbl, Kotak Seurities said in a report. End
US$1 = 74.86 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Akul Nishant Akhoury
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